Motion to Quash in CODY KERNS ET AL VS FXWINNING, LTD. ET AL| Trellis.Law

On July 24, 2023 a Motion,Ex Parte was filed involving a dispute between Kerns Capital Management, Inc., Kerns, Cody, Wftmb Holdings Llc, and Bbrc Real Estate, Llc, Brito Cutie, Rafael, Da Rocha Gomes Bastos, Renan, Fxwinning, Ltd., Kuschner, Julian, Lopez, Jonathan, Merino, David, for Business Torts in the District Court of Miami-Dade County.

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Filing # 186556582 E-Filed 11/20/2023 11:52:08 PM

I! THE CIRCUIT COURT OF THE ELEVE!TH JUDICIAL CIRCUIT
I! A!D FOR MIAMI-DADE COU!TY, FLORIDA

CODY KERNS, et al.,
Plaintiffs, CASE NO.:2023-020202-CA-01
v.

FXWINNING, LTD., et al.
Defendants.

DEFENDANT FXWINNING LTD’S MOTIONS TO QUASH SERVICE OF PROCESS,
TO DISMISS AME!DED COMPLAI!T FOR LACK OF PERSO!AL JURISDICTIO!,
OR ALTER!ATIVELY, FOR FAILURE TO STATE A CLAIM

Defendant FxWinning Ltd. (“FX”), specially appearing by and through undersigned

counsel for the sole purpose of contesting jurisdiction, and pursuant to Fla. R. Civ. P. 1.070 and

140, and supported by the Declaration of Rafael Brito Cutie (the “Brito Declaration”)1 and the

legal opinion of Anthony Marrin, Hong Kong counsel (the “Hong Kong Opinion”),2 moves to

Quash Service of Process and/or to Dismiss the Amended Complaint, and states:

I!TRODUCTIO!

Plaintiffs made no effort to properly locate and serve service of process upon Defendant

FX. Plaintiffs filed an Ex Parte Motion for an Order Authorizing Service of Process Via Email

1
Attached as Exhibit A. Merino submits the Verified Brito Declaration previously submitted in the CFT Solutions,
LLC, et al v. FXWINNING, LTD, et al., Case No: 2023-016392-CA-01, D.E. 40 at Ex. A.
2
Attached as Exhibit B.

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predicated only on the fact that Plaintiffs had communicated with FX via these electronic means.

The Plaintiffs completely disregarded the Florida Rules of Civil Procedure and Florida law and

requested ex parte that this Court grant them permission to serve FX without even attempting to

locate his address or attempting personal service under the Hague Service Convention.

Further, even if Plaintiffs had properly served service of process upon FX, which they have

not, Plaintiffs’ Amended Complaint does not present a sufficient basis for this Court to exercise

jurisdiction over it. For purposes of this Motion to Quash and to Dismiss, this Court is not required

to accept those allegations as true.

As such, FX respectfully requests that this Court quash the purported service of process on

him; that attempted service is not in compliance with Florida law. Further, FX prays that this

Court will dismiss the Amended Complaint for lack of personal jurisdiction over it.

RELEVA!T PROCEDURAL HISTORY

1. On July 24, 2023, Plaintiffs, Cody Kerns (“Kerns”), Kerns Capital Management,

Inc. (“Kerns Capital”), and WFTMB Holdings LLC (“WFTMB”) as assignee of Christopher

McGinnis (“McGinnis”) (collectively, “Plaintiffs”) filed their original complaint in this action (the

“Original Complaint"). See D.E. 2.

2. On August 3, 2023, Plaintiffs filed their Ex Parte Motion for an Order Authorizing

Service of Process Via Email and Whatsapp Messaging on Defendant David Merino (“Merino”)

(the “Ex Parte Motion on Service”). See D.E. 18.

3. In their Motion Plaintiffs do not describe a single attempt to obtain a valid address

where they might attempt to serve Merino personally. Plaintiffs do not even allege that FX’s

whereabouts are unknown. Instead, Plaintiffs simply represent to the Court that Kerns and Merino

have communicated via electronic means. See Ex Parte Mot. on Service ¶¶ 1-7.

25.

5. On August 14, 2023, the Clerk issued summons for FX at the email address

support@FXWinning.info (the “FX Summons”). See D.E. 28.

6. On August 24, 2023, the Plaintiffs filed a Return of Service indicating that an email

serving FX was sent via email to Support@fxwinning.info. See D.E. 45.

7. Before FX could respond to the Original Complaint and raise his insufficient

service of process arguments, this Court dismissed the Original Complaint in part. See D.E. 88.

8. On October 31, 2023, Plaintiffs filed their Amended Complaint (the “Amended

Complaint”). See D.E. 96.

9. The Amended Complaint was served upon the undersigned via the court’s e-filing

system. However, per Fla. R. Jud. Admin., Rule 2.516(a), such e-service is not the equivalent of

“service of formal notice” upon FX of the Amended Complaint.

MOTIO! TO QUASH ALTER!ATE SERVICE

A. Basis for Motion to Quash.

When a litigant is confronted by insufficient service, “the proper action is to quash the

invalid service.” Caban v. Skinner, 648 So. 2d 251 (Fla. 3d DCA 1994). “Because of the

importance of litigants receiving notice of actions against them, statutes governing service of

process are to be strictly construed and enforced.” Shurman v. Atl. Mortg. & Inv. Corp., 795 So.

2d 952, 954 (Fla. 2001). “The court cannot proceed in a matter until proper proof of valid service

is made.” Re-Employment Servs., Ltd. v. Nat’l Loan Acquisitions Co., 969 So. 2d 467, 471 (Fla.

5th DCA 2007). The party invoking the court’s jurisdiction has the burden of proving proper

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service of process. Empire Beauty Salon v. Commer. Loan Solutions IV, LLC, 159 So. 3d 136, 139

(Fla. 5th DCA 2014).

Service of process of the original complaint must be quashed because Plaintiffs have failed

to comply with the requirements of section 48.167(c) of the Florida Statutes. As the Hong Kong

Opinion establishes, Plaintiffs’ attempts to serve process on FX violate Hong Kong’s interpretation

of the Hague Convention on Hague Convention on the Service Abroad of Judicial and

Extrajudicial Documents in Civil or Commercial Matters (the “HCCH” or the “Hague

Convention”). Further, FX is contemporaneously filing the Declaration, which confirms that there

is no basis for this Court to exercise jurisdiction over it. Together, the Declaration and the Hong

Kong Opinion satisfy any burden that FX might have had to contest service and jurisdiction. For

that reason, unless Plaintiffs come forward with evidence satisfying the rules that are discussed in

Venetian Salami, the Court must quash their attempted service and dismiss FX from this case.

B. Procedural Background on Alleged Service of Process on FX.

On August 3, 2023, Plaintiff filed its ex parte motion for an order authorizing service of

process via email on FX pursuant to section 48.197, Florida Statutes (the “Ex Parte Motion”). On

August 22, 2023, Plaintiffs attempted service of process on FX, via email, with the original

complaint, summons, and first request for production. On September 11, 2023, counsel for FX

filed its notice of limited appearance for the purpose of challenging service of process, venue, and

jurisdiction.

October 25, 2023, was the original deadline for FX to respond to the complaint to challenge

service of process and jurisdiction. However, on October 2, 2023, before FX filed its response, the

Court dismissed the original complaint and ordered Plaintiffs to file an amended complaint.

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On October 31, 2023, Plaintiff filed its amended complaint, which was served via the

Court’s e-service system to counsel of record. As such, Plaintiffs’ e-service of the amended

complaint does not equate to “service of formal notice” and does not constitute service of process.

See Fla. R. Jud. Admin., Rule 2.516(a). FX has preserved its right to challenge service of process

of the original complaint and, if successful, would require Plaintiffs to re-serve FX with process.

C. Deficiencies in Plaintiffs’ Service of Process.

On page 3 of the Ex Parte Motion, Plaintiffs appear to have relied on sections 48.102 and

48.197(c) of the Florida Statutes to serve FX via email. The latter statute states in pertinent part as

follows:

(1) Service of process may be effectuated in a foreign country upon a
party, other than a minor or an incompetent person, as provided in any of
the following:
...
(c) Pursuant to motion and order by the court, by other means, including
electronically by e-mail or other technology, which the party seeking
service shows is reasonably calculated to give actual notice of the
proceedings and is not prohibited by international agreement, as the
court orders. (emphasis added).

Plaintiffs’ attempted service of process satisfies neither statute. First, Fla. Stat. §section

48.102 requires that a party first conduct due diligence in effectuating personal service of process

on a foreign limited liability company, like FX. The Ex Parte Motion contains no explanation of

any due diligence conducted by Plaintiffs prior to seeking leave of Court to serve FX via email.

Second, Fla. Stat. §section 48.197(c) requires that service by email or other technology “is

not prohibited by international agreement.” Here, the Hong Kong Opinion supports FX’s argument

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that service of process by email does not conform with Hong Kong’s interpretation of the HCCH

and would not be recognized under Hong Kong Law.3

Hong Kong law does not permit service of process on a Hong Kong company through

email except under limited circumstances. Ex. B, ¶ 13.4 Further, service by email does not conform

with Hong Kong’s legal interpretation of the HCCH. Id., ¶ 33. Hong Kong law does not interpret

service of process via “registered post” to also include email. The Hong Kong Opinion opines that

a Hong Kong court would give the same interpretation to “postal channel,” in the HCCH, as it

would to “registered post.” Id., ¶¶ 34-35.

The Supreme Court has held that if service of process falls within the Hague Convention,

the trial court should grant a motion to quash when service is not in compliance with that

Convention. See Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694, 705 (1988). Fla.

Stat. §Section 48.167(c) only permits service of process by email if it is not prohibited by

international agreement and nothing in the HCCH expressly allows for service of process via

email. Ex. B, ¶ 36. Plaintiffs’ Ex Parte Motion relies on Emqore Envesecure Private Cap. Tr. v.

Singh, 2020 U.S. Dist. LEXIS 260456 (D.N.J. July 9, 2020) for the proposition that a Hong Kong

company can be served by email. However, neither the court in that case or any other cases cited

by Plaintiff relied on expert testimony of Hong Kong law and Hong Kong’s interpretation of the

HCCH. Therefore, because the Hong Kong Opinion is authoritative, the Emqore decision should

not persuade this Court.

MOTIO! TO DISMISS FOR LACK OF PERSO!AL JURISDICTIO!

3
In Hong Kong, Service of process on a Hong Kong company is effectuated by leaving the complaint and
accompanying documents at the registered agent’s office of the Hong Kong company or sending it by post to the
registered agent. Ex. B, ¶ 12. For $1.50 - $2.00 per search, a party can search the Hong Kong Companies’ registry to
determine the address of a company’s registered agent. Id., ¶ 19. FX has a registered agent in Hong Kong. Id., ¶ 22.
4
Service of process via email is only permissible under Hong Kong law after a showing by a plaintiff that the usual
service methods have not worked. Ex. B, ¶¶ 25 – 27.

Should this Court find service on FX to have been proper, Merino further seeks for this

Court to dismiss the Amended Complaint for Lack of Personal Jurisdiction pursuant to Fla. R. Civ.

P. 1.140.

A. Standard for Dismissal for Lack of Personal Jurisdiction, Generally.

Plaintiffs attempt to invoke this Court’s personal jurisdiction over FX, a Hong Kong

company, based on specific jurisdiction under Fla. Stat. §section 48.193 (the “Long Arm Statute”).

Florida courts require substantial proof before extending in personam jurisdiction over a

nonresident like FX. See Prentice v. Prentice Colour, Inc., 779 F. Supp. 578, 587 (M.D. Fla. 1991).

Courts are tasked with the two-pronged jurisdictional analysis of (1) whether the complaint alleges

sufficient jurisdictional facts to bring the action within the ambit of Florida’s long-arm statute, Fla.

Stat. § 48.193, and (2) whether sufficient minimum contacts are present to satisfy due process.

Williamson v. Prime Sports Mktg., LLC, 314 So. 3d 480, 482 (Fla. 3d DCA 2020).!!

Initially, the plaintiff bears the burden of pleading sufficient jurisdictional facts to fall

within the long-arm statute. Fincantieri-Cantieri Navali Italiani S.P.A. v. Yuzwa, 241 So. 3d 938,

941–42 (Fla. 3d DCA 2018) (citing Venetian Salami Co. v. Parthenais, 554 So. 2d 499 (Fla.

1989)). General and conclusory jurisdictional allegations are insufficient for a plaintiff to meet its

burden. See Pub. Gas Co. v. Weatherhead Co., 409 So. 2d 1026 (Fla. 1982) (affirming the Third

District Court of Appeals holding that general and conclusory jurisdictional allegations are

insufficient); see also Loving v. Viecelli, 164 So. 2d 560, 561 (Fla. 3d DCA 1964) (“mere legal

conclusions are not sufficient unless substantiated by allegations of ultimate fact.”).

If the Court determines that the Amended Complaint contains sufficient allegations to

establish that the Long Arm Statute applies, the Court must then determine whether FX has

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sufficient minimum contacts with the State of Florida to satisfy the due process requirements of

the Fourteenth Amendment. See Blumberg v. Steve Weiss & Co., 922 So, 2d 361, 363 (Fla. 3d

DCA 2006). In other words, both questions must be answered in the affirmative “in order to

exercise jurisdiction over a non-resident defendant.” Estes v. Rodin, 259 So. 3d 183, 190 (Fla. 3d

DCA 2018) (affirming dismissal for lack of personal jurisdiction). You cannot have one without

the other. See id.

“If the plaintiff fails to sufficiently plead personal jurisdiction over a nonresident

defendant, the defendant may raise the jurisdictional issue by motion.” Crownover v. Masda Corp.,

983 So. 2d 709, 712 (Fla. 2d DCA 2008). However, only where the allegations in the complaint

are sufficient to establish personal jurisdiction, both under the Long-Arm Statute and the requisite

minimum contacts, does the burden then shift to the defendant to contest jurisdiction by filing a

legally sufficient affidavit or other sworn proof contesting the jurisdictional allegations. See id. at

712-13 (citing Venetian Salami, 554 So. 2d at 502; Rolley v. de Bizemont, 159 So. 3d 351, 356

(Fla. 3d DCA 2015)).

“To be legally sufficient, the defendant’s affidavit must contain factual allegations which,

if taken as true, show that the defendant’s conduct does not subject him to jurisdiction.” Team

Health Holdings Inc. v. Caceres, 2021 WL 1395599 (Fla. 3d DCA Apr. 14, 2021) (citations

omitted). “The burden then shifts [back] to the plaintiff to prove via counter-affidavit ‘the basis

upon which jurisdiction may be obtained.”’ Estes, 259 So. 3d at 190 (citing Venetian Salami, 554

So. 2d at 502). Where the affidavits offered by the plaintiff and defendant cannot be reconciled, a

limited evidentiary hearing is required in order for the trial court to determine the jurisdictional

issue. Id. at 190-91.

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Florida Statute § 48.193 determines when a Florida court has personal jurisdiction of a

foreign limited liability company. The Long Arm Statute sets forth two means by which a

nonresident can be subject to personal jurisdiction in this state: (1)(a) the defendant performs an

act enumerated in Sections 48.193(1)(a)(1) through (9), and the claim arises from those acts

(known as “specific jurisdiction”); or (2) the defendant engages in substantial and not isolated

activity within the state, regardless of whether there is a connection between the activity and the

claim (known as “general jurisdiction”). See Fla. Stat. § 48.193(1)-(2§ 48.193(1)-(2), Fla. Stat.)

(2022).

Under Florida law, a defendant may raise a challenge to personal jurisdiction through

affidavits, documents, or testimony. See Jet Charter Service, Inc. v. Koeck, 907 F.2d 1110, 1112

(11th Cir. 1990); Venetian Salami Co., 554 So. 2d at 502. After such a challenge, the burden then

falls on the plaintiff to prove that jurisdiction is proper. Jet Charter Service, 907 F.2d at 1112;

Venetian Salami Co., 554 So. 2d at 502. To meet its burden, a plaintiff must support its

jurisdictional allegations affirmatively and may not merely rely upon the factual allegations set

forth in its complaint. See Structural Panels, Inc. v. Texas Aluminum Industries, Inc., 814 F. Supp.

1058, 1064 (M.D. Fla. 1993). “The failure of the plaintiff to refute the allegations of the

defendant’s affidavit requires that a motion to dismiss be granted.” Washington Capital Corp., 695

So. 2d at 841.

To be legally sufficient, the defendant's affidavit must contain factual allegations which, if

taken as true, show that the defendant's conduct does not subject him to jurisdiction." Team Health

Holdings Inc. v. Caceres, 2021 WL 1395599 (Fla. 3d DCA Apr. 14, 2021) (citations omitted).

"The burden then shifts [back] to the plaintiff to prove via counter affidavit 'the basis upon which

jurisdiction may be obtained."' Estes v. Rodin, 259 So. 3d 183, 190 (Fla. 3d DCA 2018) (citing

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Venetian Salami, 554 So. 2d at 502). Where the affidavits offered by the plaintiff and defendant

cannot be reconciled, a limited evidentiary hearing is required in order for the trial court to

determine the jurisdictional issue. Id. at 190-91.

B. Plaintiffs Cannot Meet Their Burden of Proof.

The Long Arm Statute subjects nonresidents to specific jurisdiction for actions arising from

specific acts enumerated in the statute. See Fla Stat. § 48.193(1)(a)(1)-(9). A plaintiff is required

to either track the language of the Long Arm Statute or allege facts sufficient to show that the

defendant’s actions fit within one or more subsections of the statutes. Parisi v. Kingston, 314 So.

3d 656, 660 (Fla. 3d DCA 2021). Here, the Amended Complaint makes only two bare allegations

which may address the matter of personal jurisdiction. The Amended Complaint baselessly alleges

“upon information and belief” that FX maintains an office Miami-Dade County, Florida. Am.

Compl. ¶ 5. The Amended Complaint then goes on to track the Long Arm Statute’s specific

jurisdiction language to falsely allege personal jurisdiction over FX. Am. Compl. ¶ 13.

Although this paragraph contains legal conclusions for extending long-arm jurisdiction,

FX has challenged personal jurisdiction through the Declaration. The Amended Complaint is

otherwise devoid of any factual allegations tying Plaintiff’s causes of action to Florida. Instead,

the complaint relies on allegations that that Lopez and Kuschner were simultaneously acting as

agents of FX and Merino, or only Merino, to draw FX into the Court’s jurisdiction.5

5
“Actual authority ‘exists when a principal delegates authority to an agent by expressly authorizing the agent to do a
delegable act.’ To establish actual authority, a plaintiff must prove: ‘(1) acknowledgment by the principal that the
agent will act for him, (2) the agent's acceptance of the undertaking, and (3) control by the principal over the actions
of the agent.’” Fla. Power & Light Co. v. McRoberts, 257 So. 3d 1023, 1026 (Fla. 4th DCA 2018) (citations omitted);
see also Gannon v. Airbnb, Inc., 295 So. 3d 779, 780 (Fla. 4th DCA 2020) (“The nature and extent of the relationship
of parties said to occupy the status of principal and agent presents a question of fact, and is not controlled by descriptive
labels employed by the parties themselves. The scope of the agent's authority is limited to what the principal has
authorized the agent to do.”).

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But, as reflected in the Declaration of Rafael Brito Cutie, FX lacks the sufficient contacts

with Florida to warrant a finding by this Court that it has personal jurisdiction over the Defendant.

The Declaration establishes that FX does not maintain or use any workspace in Florida. Ex. A, ¶¶

5, 16. FX has no employees or agents in Florida. Id. at ¶¶ 17, 21. Importantly, FX does not conduct

any business in Florida nor does FX direct any actions towards Florida. Id. at ¶¶ 15, 16, 18, 20, 22.

Even the Terms and Conditions referenced in the Amended Complaint establish that “Clients

residing in the United States will not be approached by the Company” and “Client ‘certifies’ his

country of residence and confirms that it is not a resident of the United States.” Id. at ¶ 6 and

Exhibit A, §§ 4.9, 8.8. The websites alluded to in the Amended Complaint further state that FX

does not offer services to the United States. Id. at 7 and Exhibit B. FX does not own any assets in

Florida. Id. at ¶ 11. Nor does FX advertise, solicit, or market its services to the United States. Id.

at ¶ 20. Lastly, Mr. Cardenas was not the Vice President of FX and did not perform functions for

FX out of a space in Miami-Dade County, Florida. Id. at ¶ 18.

Accordingly, FX has met its burden of providing a legally sufficient affidavit explaining

why FX is not subject to personal jurisdiction by this Court, Plaintiffs are required to provide

sufficient evidentiary support to refute FX’s affidavit. Otherwise, this Court must dismiss

Plaintiffs’ Amended Complaint. 6

C. FXs does not have Sufficient Minimum Contacts with the State of Florida that
Warrants Hauling it into this Court.

The terms “contacts” or “minimum contacts” are absent from the Amended Complaint.

However, even if Plaintiffs satisfactorily alleged FX’s minimum contacts with the State of Florida,

the Declaration in support of the instant Motion refutes the same. Plaintiffs failed to show that FX

6
Plaintiffs make no allegations asserting general jurisdiction over FX.

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has sufficient minimum contacts with the State of Florida such that it should reasonably anticipate

being haled into a court here.

The “minimum contacts” prong of the Venetian Salami analysis “is controlled by United

States Supreme Court precedent interpreting the Due Process Clause and imposes a more

restrictive requirement” than the long-arm statute. Estes, 259 So. 3d at 190 (quoting Execu-Tech

Bus. Sys. v. New Oji Paper Co., 752 So. 2d 582,584 (Fla. 2000)). “[D]ue process requires that the

nonresident defendant have certain minimum contacts with the forum state such that the

maintenance of the suit does not offend traditional notions of fair play and substantial justice.”

Pres-Kap, Inc. v. Sys. One, Direct Access, Inc., 636 So. 2d 1351, 1352 (Fla. 3d DCA 1994). “Due

process limits on the State’s adjudication authority principally protect the liberty of the nonresident

defendant - not the convenience of plaintiffs or third parties.” Walden v. Fiore, 571 U.S. 277, 284

(2014). “Additionally—and particularly germane to this [case]—the required due process analysis

differs depending on whether it is (1) specific or (2) general jurisdiction being asserted.” Caiazzo

v. American Royal Arts Corp., 73 So. 3d 245, 251 (Fla. 4th DCA 2011). Since no allegations of

general jurisdiction exist, only specific jurisdiction due process concerns will be addressed herein. 7

Caiazzo aptly summarized the requirements of specific jurisdiction due process as follows:

The United States Supreme Court, in a handful of leading cases, laid out the proper
due process standard for cases involving specific jurisdiction. First, in the interest
of preserving “traditional notions of fair play and substantial justice” a state may
exercise specific jurisdiction only over a defendant who has certain “minimum
contacts” with the state. Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct.
154, 90 L.Ed. 95 (1945). This so-called “minimum contacts” rule is the
“constitutional touchstone” for such jurisdiction. Burger King Corp. v. Rudzewicz,
471 U.S. 462, 474, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). The Court later clarified
that the notion of minimum contacts encompasses only situations in which the

7
For the requirements of establishing minimum contacts when general jurisdiction is asserted, see Caiazzo, 73 So. 3d
at 251-53.

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defendant has “purposefully avail[ed] [himself or herself] of the privilege of
conducting activities within the forum State, thus invoking the benefits and
protections of its laws.” Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2
L.Ed.2d 1283 (1958); see also Burger King, 471 U.S. at 474–75, 105 S.Ct. 2174;
World–Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62
L.Ed.2d 490 (1980). Finally, the Court has stated that simply being able to foresee
a product's arrival in the forum state will never by itself establish minimum contacts
over the seller of that product. World–Wide Volkswagen, 444 U.S. at 297, 100 S.Ct.
580. Instead, foreseeability is relevant only when “the defendant's conduct and
connection with the forum State are such that he should reasonably anticipate being
haled into court there.” Id. This is because an entity that purposefully avails itself
of the privilege of conducting activities within the forum state “has clear notice that
it is subject to suit there, and can act to alleviate the risk of burdensome litigation
by procuring insurance, passing the expected costs on to customers, or, if the risks
re too great, severing its connection with the State.” Id.

73 So. 3d at 251. As the court summarized in Estes, in specific jurisdiction cases, the Court must

examine the following:

(1) whether the plaintiffs' claims ‘arise out of or relate to’ at least one of the
defendant's contacts with the forum; (2) whether the nonresident defendant
‘purposefully availed’ himself of the privilege of conducting activities within the
forum state, thus invoking the benefit of the forum state's laws; and (3) whether the
exercise of personal jurisdiction comports with traditional notions of fair play and
substantial justice.'

259 So. 3d at 192 (quoting Louis Vuitton Malletier, S.A. v. Mosseri, 736 F. 3d 1339, 1355 (11th

Cir. 2013). Here, none of the allegations in Amended Complaint would satisfy the Estes tests and

show this Court that it has jurisdiction over FX.

i. At best, Plaintiffs’ Claims Arise Out of or Relate to Hong Kong

As to the first element, the inquiry “must focus on the direct causal relationship among ‘the

defendant, the forum, and the litigation.”’ Id. (citations omitted). In the instant case, Plaintiffs do

not specifically allege that FX personally committed an intentional tort in Florida. Rather, all of

Plaintiffs’ Counts rely upon the allegations that Kuschner and Lopez’s misrepresentations to

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Plaintiffs were made while Kuschner and Lopez were simultaneously acting in their “individual

capacity” and as “agents of FXWinning and Merino.” Plaintiffs do not distinguish when Kuschner

and Lopez are acting in their individual capacity or as agents of FX. The allegations of agency are

sometimes extremely vague. Even if taken as true, those allegations could not form the basis for

jurisdiction over FX. For example, in ¶ 35, Lopez allegedly had a “meeting in Miami-Dade County,

Florida and/or via telephone…acting in his individual capacity and as agent of FXWinning and

Merino, stated that Merino was his ‘partner.’” Was the meeting physically held in Miami or was

it over telephone from different locations? Was Merino present or not present? Did Merino

authorize Lopez to make such a representation or was Lopez lying? Nevertheless, agents cannot

serve two masters.

Further, the amended complaint does not allege the source or scope Lopez’s and

Kuschner’s agency and how they demonstrated their agency to Plaintiffs. Plaintiffs make

conclusory representations but make no attempt to show why they could reasonably rely upon

Lopez’s and Kuschner’s representations. For example, there is no allegation that Kuschner and

Lopez appeared on the FX website. There is no representation that Merino or any officer of FX

introduced Lopez or Kuschner as an FX agent. The amended complaint does not allege how FX

exerted control over the Lopez and Kuschner. To the contrary, as the Declaration shows, FX does

not have an office nor any agents in the State of Florida.

As to any of the pertinent transactions that might have given rise to a cause of action,

Plaintiffs have completely failed to state the time, place, or manner by which those “overt acts”

were committed. Plaintiffs did not plead a single fact to establish any specific agreements between

any of the defendants to commit a tort, and none of those paragraphs make any mention that any

such agreement was directed at or made in Florida. Simply put, Plaintiffs have failed to allege any

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fact that would tie any action by FX to Florida. The strongest tie that Plaintiffs have attempted to

make between FX and any location is the allegation in ¶ 5, which merely states that FX has an

office in Miami, but no address, or even a neighborhood, is provided. Nevertheless, the Brito

Declaration refutes all of Plaintiffs’ other allegations about the locations in which FX operates.

Brito has stated that FX does not operate in Miami or anywhere else in the United States. For those

reasons, Plaintiffs have failed to satisfy their burden of pleading or proving a direct causal

relationship among ‘the defendant, the forum, and the litigation.”

ii. FX did not Purposefully Avail itself of the State of Florida

As to the second element, the Court in Estes explained that in the context of intentional

torts, as is the case here, “there are two tests to determine whether purposeful availment occurred:

the ‘effects test’ articulated in Calder v. Jones, 465 U.S. 783, 104 S. Ct. 1482, 79 L. Ed. 2d 804

(1984), and the traditional analysis.” Id. (citing Louis Vuitton, 736 F.3d at 1356).

“Under the ‘effects test,’ a nonresident defendant's single tortious act can establish
purposeful availment, without regard to whether the defendant had any other
contacts with the forum state, where ‘the tort: “(1) [was] intentional; (2) [was]
aimed at the forum state; and (3) caused harm that the defendant should have
anticipated would be suffered in the forum state.””

Id. (citations omitted). The question for the Court is “whether the defendant's conduct connects

him to the forum in a meaningful way.” Id.

“Under the traditional test, courts ‘identify all contacts between a nonresident
defendant and Florida’ and determine ‘whether those contacts: (1) are related to the
plaintiffs cause of action; (2) involve some act by which the defendant purposefully
availed himself of the privileges of doing business within the forum; and (3) are
such that the defendant should reasonably anticipate being haled into court in the
forum.”

Id. (citations omitted).

did not, and indeed cannot, establish that FX purposefully availed itself of the privilege of

conducting activities within the State of Florida; in fact, the evidence establishes that FX took

express and direct actions to distance itself from the United States. Plaintiffs allege that they relied

on FX’s Misrepresentations #1 through #4, #10 and #11, but none of these alleged

misrepresentations were made in Florida by an individual with authority to act on behalf of FX.

There are simply no allegations in the Amended Complaint that FX actually solicited or conducted

business in Florida or intentionally directed any harm toward the State of Florida that FX would

have anticipated being hauled into the forum state. Moreover, FX certainly would not have

anticipated that the operation of its business could subject it to jurisdiction in Florida. It is not

organized or incorporated in Florida and does not business in this state. See Brito Declaration.

Moreover, FX takes great measures to make its customers aware that it fully operates outside the

United States and expressly precluded US persons from conducting business with it.

iii. Traditional Notions of Fair Play and Substantial Justice Warrant Dismissal

The third and final prong of the due process analysis requires the Court to consider four

factors: “(1) the burden on the defendant; (2) the forum's interest in adjudicating the dispute; (3)

the plaintiff's interest in obtaining convenient and effective relief; and (4) the judicial system's

interest in resolving the dispute.” Id. at 197. The primary concern in this analysis is the burden on

the defendant. Id. In the instant case, again, the Amended Complaint completely disregards the

obligation of establishing minimum contacts. None of the actions or events relating to this

proceeding occurred in the United States, let alone Florida. The Amended Complaint failed to

allege that FX had contacts with the State of Florida, no less, minimum contacts sufficient to haul

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it into a Florida court. Accordingly, this Court should find that Plaintiffs failed the third prong of

Venetian Salami.

MOTIO! TO DISMISS FOR FAILURE TO STATE A CAUSE OF ACTIO!

FX has appeared specially for the limited purpose of contesting issues of service and

jurisdiction. To avoid any waiver of arguments, in this section, FX will summarize its basis for

dismissal of claims asserted against it in the Amended Complaint. This section is not intended to

extend FX’s appearance or to seek affirmative relief beyond that which is required to contest

jurisdictional issues.

If this Court does not dismiss FX from this action for the reasons stated above, FX moves

to dismiss the claims asserted against it. Alternatively, if this Court finds that FX was properly

served with process, then moves to dismiss Counts 1, 2, 3, 14, 15, 16, 26, 27 and 28 for failure to

state a cause of action.

A. Counts 1, 2 and 3 Fail to State a Cause of Action for Common Law Fraud

“[T]he elements of common law fraud under Florida law are ‘(1) a false statement

concerning a material fact; (2) the representor's knowledge that the representation is false; (3) an

intention that the representation induce another to act on it; and (4) the consequent injury by the

party acting in reliance on the representation.’” Ford v. Koutoulas, 2023 U.S. Dist. LEXIS 55399,

at *29 (M.D. Fla. Mar. 30, 2023) (citations omitted). Fraud and circumstances surrounding the

fraud must be pled with specificity. See Fla. R. Civ. P. 1.120(b). Plaintiffs Kerns and Kerns Capital

claim to have jointly relied on Misrepresentations #1 through #4. Those alleged misrepresentations

were made by Kuschner and Lopez, individually and as agent of FX, but they were never

authorized to act as agents of FX. See Ex. A, ¶ 21. Additionally, Kerns, individually, also alleges

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that he relied on Misrepresentations #10 and #11, which were made by Lopez, individually and as

agent of FX, but he who was also never authorized to act as an agent of FX. The amended

complaint does not contain allegations that sufficiently plead that Lopez and Kuschner had actual

or apparent authority to act as agents for FX. Regarding apparent authority:

“An agent's authority need not be conferred in express terms, but may be implied
or apparent under justifying circumstances. An agency relationship based on
apparent authority only exists if the following three elements are present: (1) a
representation by the purported principal; (2) reliance on that representation by a
third party; and (3) a change in position by the third party in reliance on the
representation. Apparent authority does not arise from the subjective
understanding of the person dealing with the purported agent, nor from
appearances created by the purported agent himself. Instead, the words and
actions of the principal must be the focus because apparent authority exists only
where the principal creates the appearance of an agency relationship.”

All Seasons Condo. Ass'n v. Patrician Hotel, LLC, 274 So. 3d 438, 441 (Fla. 3d DCA 2019)

(emphasis added).

The only allegation that purports to confer agency status on Kuschner and Lopez by FX is

¶ 30 which alleges: “Prior to February 2022, FXWinning authorized Lopez, Kuschner, Merino and

other to solicit clients that would engage in foreign exchange trading as well as open accounts,

with FXWinning.” This does not sufficiently allege actual authority to act on behalf of FX because

there was no express writing signed by an individual with authority for FX. Further, the Amended

Complaint contains no allegations that FX controlled Lopez, Kuschner, and Merino’s actions. This

allegation also does not sufficiently allege apparent authority because the allegation does not state

that the “authority” representation was made to Plaintiffs. This allegation is also incredibly vague

and fails to allege the bare minimum facts; it is not clear how Lopez and Kuschner appeared to be

agents of FX to Plaintiff. There is no allegation that those defendants were listed as agents on the

FX websites. To the contrary, the website contents that Plaintiffs reference state that it does not do

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business in the United States. The Plaintiffs do not allege that they met those defendants at an FX

office in Miami. Therefore, the complaint does not sufficiently allege any false statements of fact

made by FX.

Plaintiff WFTMB alleges that it relied on Misrepresentations #5, #9 and #12. Likewise,

and assuming those allegations are true, the cited misrepresentations were not made by FX. Again,

WFTMB has not sufficiently pled that Lopez and Kuschner were acting as agents for FX.

Additionally, none of the above Misrepresentations were made by Merino to Plaintiffs.

Last, even assuming that the misrepresentations were made by FX, and they were not, “[i]t is well

settled in Florida that, where alleged misrepresentations relate to matters already covered in a

written contract, such representations are not actionable in fraud.” Peebles v. Puig, 223 So. 3d

1065, 1068 (Fla. 3d DCA 2017).

B. Counts 14, 15, and 16 Fail to State a Cause of Action for !egligent
Misrepresentation

“To state a claim for negligent misrepresentation under Florida law, a plaintiff must allege

the following: (1) misrepresentation of a material fact; (2) that the representor made the

misrepresentation without knowledge as to its truth or falsity or under circumstances in which he

ought to have known of its falsity; (3) that the representor intended that the misrepresentation

induce another to act on it; and (4) that injury resulted to the party acting in justifiable reliance on

the misrepresentation.” Holguin v. Celebrity Cruises, Inc., 2010 U.S. Dist. LEXIS 43638, at *3

(S.D. Fla. May 4, 2010). Negligent misrepresentation must also be pled with specificity since it is

based on fraud. Plaintiffs, Kerns and Kerns Capital, both rely on Misrepresentations #1 through

#4. Kerns, individually, further relied on Misrepresentations #10 and #11. FX adopts its above

arguments above that Lopez and Kuschner were never agents with actual or apparent authority to

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act on behalf of FX and therefore, FX did not make Misrepresentations #1 through #4, #10 and

#11 to Plaintiffs, Kerns and Kerns Capital. Misrepresentations #10 and #11 were made via text

message and even assuming Lopez was an agent of FX, he is not, FX is not even mentioned in the

text messages. Similarly, Plaintiff WFTMB alleges that it relied on Misrepresentations #5, #9 and

#12. Likewise, FX adopts its above arguments above that Lopez and Kuschner were never agents

with actual or apparent authority to act on behalf of FX and therefore, FX did not make

Misrepresentations #5, #9 and #12 to Plaintiff, WFTMB. FX also adopts its arguments that Merino

never made any of these misrepresentations to Plaintiffs and the arguments made in the Puig case.

C. Count 26 Fails to State a Cause of Action for FDUTPA

“FDUTPA prohibits ‘unfair methods of competition, unconscionable acts or practices, and

unfair or deceptive acts or practices in the conduct of any trade or commerce.’ § 501.204, Fla. Stat.

To state a FDUTPA claim, a plaintiff must allege ‘(1) a deceptive act or unfair practice, (2)

causation, and (3) actual damages.’” Garrett-Alfred v. Facebook, Inc., 540 F. Supp. 3d 1129, 1141

(M.D. Fla. 2021). Plaintiffs allege that they relied upon Misrepresentations #1 through #12 by FX.

Again, FX adopts its above arguments that Lopez and Kuschner were never agents with actual or

apparent authority to act on behalf of FX and therefore, FX did not engage in any deceptive act or

unfair practice. T

Case Info

Judge

CA44 - Downtown Miami - Judge Walsh, Lisa S Track Judge’s New Case

Case No.

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Document Filed Date

November 20, 2023

Case Filing Date

July 24, 2023

County

Parties

Barakat, Brian Attorney for the Defendant
BBRC Real Estate, LLC Defendant
Bianchi, Jaime Augusto Attorney for the Defendant
Brito Cutie, Rafael Defendant
da Rocha Gomes Bastos, Renan Defendant
FXWinning, Ltd. Defendant
Kaplan, Justin B Attorney for the Defendant
Kerns Capital Management, Inc. Plaintiff
Kerns, Cody Plaintiff
Kuschner, Julian Defendant
Levine David M Attorney for the Plaintiff
Lopez, Jonathan Defendant
Merino, David Defendant
WFTMB Holdings LLC Plaintiff
Fausto Sanchez Attorneys for Plaintiffs
Lauren Allen Attorneys for Plaintiffs
Ryan Todd Attorney
Elaine Kussurelis Attorney
Grant Smith Attorneys for Defendants
Jocelyne Macelloni Attorneys for Defendants
Jo-Jean Figueira Attorney
Spencer Thompson Attorney
Matthew Akiba Attorney
Michael Sontag Attorney
Zachary Dickens Attorneys for Defendants

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Motion,Ex Parte: CODY KERNS ET AL VS FXWINNING, LTD. ET AL

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